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Law Firm Litigation Insurance
Risk transfer for firms carrying WIP, conditional or contingent fee risk.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIPThis cover
- Security for costs
- The opponent's costs
- Disbursements
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
What is Law Firm Litigation Insurance?
Law Firm Litigation Insurance is a form of litigation risk transfer that may be arranged around a firm's contingent fee exposure. Risk transfer for firms carrying WIP, conditional or contingent fee risk. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
Law Firm Litigation Insurance
Not a policy. A specimen to show how this cover is structured. Cover exists only when a policy is issued, on its own wording.
- Terms
- Terms, where available, are set case by case through underwriting.
- Protects
- A firm's contingent fee exposure, depending on policy terms.
- Terms
- Limit, premium and conditions are set by underwriting on the specific risk.
Clause 1
The insured
Who it is for
Law firms that carry fee risk on conditional, damages-based or contingent terms, and firms whose clients need costs protection to litigate.
Clause 2
Insuring clause
What risks can be protected
The firm's WIP and disbursements at risk on contingent matters, and the client's adverse costs where the firm arranges cover for its clients.
Clause 3
Operation of cover
How it works
Cover can be arranged matter by matter or as a facility across a book, with the insurer relying on the firm's own case selection.
Portfolio facilities can give the firm faster, more consistent access to cover.
Clause 4
Underwriting
Underwriting factors
Underwriters look at the firm as much as the case: its track record in the relevant practice area, how it selects matters, its case management and reporting, and the concentration of risk across its book.
At matter level the usual merits, quantum and costs questions apply.
Clause 5
Proposal documents
Information required
- (a)Details of the fee arrangement (conditional, damages-based or contingent);
- (b)The WIP recorded and forecast;
- (c)Merits opinions or internal case-assessment papers;
- (d)The firm's historic results on comparable matters; and
- (e)For a book, the selection criteria and a schedule of cases.
Clause 6
Limit, premium and staging
Potential structure
Delegated or pre-agreed underwriting criteria, per-matter limits, and aggregate caps across the book.
Clause 7
Alternatives
Alternatives
- (a)Portfolio funding for the firm;
- (b)Fee-sharing with funders; and
- (c)Declining contingent work.
Clause 8
Territory
Jurisdiction notes
What a firm can charge on a contingent basis is set by local professional and statutory rules.
- (a)England and Wales permits conditional fee and damages-based agreements subject to regulation;
- (b)The United States broadly permits contingency fees; and
- (c)Several other forums restrict them in litigation while allowing outcome-related fees in arbitration.
Specimen for explanation only. Terms, limits and exclusions are set by underwriting on each matter and by the wording issued.
Frequently asked
What risks does law firm litigation insurance cover?
Fee risk the firm carries on contingent matters — WIP and disbursements — and, where the firm arranges it, its clients' adverse costs. It is separate from professional indemnity insurance.
Can a firm insure its whole contingent book?
Yes, through portfolio facilities with agreed criteria, per-matter limits and an aggregate cap across the book.
Is Law Firm Litigation Insurance available for my dispute?
Availability depends on the merits, the quantum, the costs profile and the counterparty. Every risk is assessed individually and no cover exists until a policy is issued.
Does this quote a price?
No. Pricing is a function of the specific risk and is never quoted in the abstract. Nothing on this page indicates the cost or availability of cover.
Can it be combined with litigation funding?
Frequently, yes. Funding supplies capital; insurance defines the downside. The two are often structured together.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.